Friday, October 28, 2005
Continental Divide, or Trade Matters
What drives fundamental change? On the one hand, there are catastrophic or epochal events that trigger geopolitical realignments, overnight. For a while, media coverage of terrorism suggested this would be the force that just might undermine Western civilization with great rapidity, if not confronted head-on. More recently, both terrorism and its potential impact have dropped off the front pages. Then there are quiet disputes that gradually but with determined certainty, and almost imperceptibly, rot existing alliances and global patterns. The threat to world order might just rest as much in unglamorous, unspectacular evolution over a generation or so as it may in the sudden, dynamic happenings that drive transitions with unabating speed.
On 24 October 2005 US Secretary of State Condoleezza Rice arrived in Canada for a two-day stopover. It was a trip delayed for roughly a year, and that owing to Canada’s backing away from aggressive and visible support for Washington’s plans to launch a missiles in space program. And so, after visiting roughly forty other countries, it was time for a meeting with Prime Minister Paul Martin and a rapprochement, or at least time for the pretence.
Differences that concerned both sides were discussed. For Americans, there was aid to Iraq and border security. For Martin, there was cross-border fire-arms smuggling and what the US could do to help find a solution, natural resources, and most especially the trade in softwood. Lumber stands out as perhaps the most aggravating issue between the two partners. For Canada, it may be of paramount concern; for Washington, it may not even be on the radar. And so, finding a resolution remains a priority for only one party. Following mention that some $5 billion is still owed Canada as a result of Washington allegedly unlawfully collecting tariffs on Canadian exports over the years, Rice simply joked that returning it was not possible at the moment, given she doesn’t travel with that kind of cash in her pocketbook [Global TV News, 25 October 2005]. Then she repeated calls for negotiations. Martin, meanwhile, likes to point to North American Free Trade Agreement panel rulings favouring Ottawa’s position, and notes therefore Canada neither would nor should comply with Washington’s demands to renogotiate a sealed deal. However, legal victories have not proved bankable, and brokering behind very closed doors is likely already going on.
Will views about trade prove so irreconciable that old relations between the two countries will never again be the same? Back in late September Mexico’s President Vicente Fox arrived for a brief visit with Martin, and the two Amigoes seemed to share ideas concerning trade, views that clashed sharply with Washington’s ideas and perceptions. While speaking at the Vancouver Board of Trade, Fox became openly critical of US practices, observing: “The NAFTA region is today the world's most dynamic with regard to trade exchanges…This agreement has served to increase trade volumes and subject them to rules that provide guarantees of legal certainty…Mexico regrets any unilateral decisions that fail to abide by the decisions of the arbitration panels where trade differences are discussed and aired” [Fox cited by Canadian Press, 30 September 2005].
But does this bloc within the NAFTA bloc, comprised of Canada and Mexico, come across as having either the stomach or means to establish a firmer, perhaps more combative or proactive bilateral stance? Ottawa at least appears to want to give the impression that other options are being explored. Perhaps stronger ties with Mexico, in the end, may be only a small part of a broader solution. The commodities bull market in natural resources has meant worldwide demand and, thus, prices for products such as softwood, oil, natural gas, copper, and so on are skyrocketing. And so, Ottawa asks: why, therefore, be chained to the US market? Commodites are abundant across the western provinces, and demand from China and India shows little sign of abating. So does this mean, as some officials speculate aloud, that trade can be redirected? This realignment must represent a fundamental and permanent change for our markets, and not be just a ploy to find buyers in the interim, allowing for ties between Washington and Ottawa to be cemented anew.
Do Canadians really have either the means or inclination to ship vast amounts of oil and lumber to China or India? The logistics are so daunting that almost certainly the answer is no, for now. Yet China and India may yet come to play an important role in the Canadian economy, and political scene. For instance, Chinese interests are taking over oil explorers and producers. Just recently Calgary-based PetroKazakhstan “announced today [26 October] that the acquisition of the Company for US$55.00 cash per share by CNPC International Ltd. (“CNPC”) pursuant to a Court-approved Plan of Arrangement has closed” [cited in PR Newswire, 26 October 2005]. So is it really fair to assume that continental North American trade and economic relations will forever remain unimpacted?
Stan Markotich
Send comments to stanmarkotich@yahoo.com ¶ 8:34 AM
What drives fundamental change? On the one hand, there are catastrophic or epochal events that trigger geopolitical realignments, overnight. For a while, media coverage of terrorism suggested this would be the force that just might undermine Western civilization with great rapidity, if not confronted head-on. More recently, both terrorism and its potential impact have dropped off the front pages. Then there are quiet disputes that gradually but with determined certainty, and almost imperceptibly, rot existing alliances and global patterns. The threat to world order might just rest as much in unglamorous, unspectacular evolution over a generation or so as it may in the sudden, dynamic happenings that drive transitions with unabating speed.
On 24 October 2005 US Secretary of State Condoleezza Rice arrived in Canada for a two-day stopover. It was a trip delayed for roughly a year, and that owing to Canada’s backing away from aggressive and visible support for Washington’s plans to launch a missiles in space program. And so, after visiting roughly forty other countries, it was time for a meeting with Prime Minister Paul Martin and a rapprochement, or at least time for the pretence.
Differences that concerned both sides were discussed. For Americans, there was aid to Iraq and border security. For Martin, there was cross-border fire-arms smuggling and what the US could do to help find a solution, natural resources, and most especially the trade in softwood. Lumber stands out as perhaps the most aggravating issue between the two partners. For Canada, it may be of paramount concern; for Washington, it may not even be on the radar. And so, finding a resolution remains a priority for only one party. Following mention that some $5 billion is still owed Canada as a result of Washington allegedly unlawfully collecting tariffs on Canadian exports over the years, Rice simply joked that returning it was not possible at the moment, given she doesn’t travel with that kind of cash in her pocketbook [Global TV News, 25 October 2005]. Then she repeated calls for negotiations. Martin, meanwhile, likes to point to North American Free Trade Agreement panel rulings favouring Ottawa’s position, and notes therefore Canada neither would nor should comply with Washington’s demands to renogotiate a sealed deal. However, legal victories have not proved bankable, and brokering behind very closed doors is likely already going on.
Will views about trade prove so irreconciable that old relations between the two countries will never again be the same? Back in late September Mexico’s President Vicente Fox arrived for a brief visit with Martin, and the two Amigoes seemed to share ideas concerning trade, views that clashed sharply with Washington’s ideas and perceptions. While speaking at the Vancouver Board of Trade, Fox became openly critical of US practices, observing: “The NAFTA region is today the world's most dynamic with regard to trade exchanges…This agreement has served to increase trade volumes and subject them to rules that provide guarantees of legal certainty…Mexico regrets any unilateral decisions that fail to abide by the decisions of the arbitration panels where trade differences are discussed and aired” [Fox cited by Canadian Press, 30 September 2005].
But does this bloc within the NAFTA bloc, comprised of Canada and Mexico, come across as having either the stomach or means to establish a firmer, perhaps more combative or proactive bilateral stance? Ottawa at least appears to want to give the impression that other options are being explored. Perhaps stronger ties with Mexico, in the end, may be only a small part of a broader solution. The commodities bull market in natural resources has meant worldwide demand and, thus, prices for products such as softwood, oil, natural gas, copper, and so on are skyrocketing. And so, Ottawa asks: why, therefore, be chained to the US market? Commodites are abundant across the western provinces, and demand from China and India shows little sign of abating. So does this mean, as some officials speculate aloud, that trade can be redirected? This realignment must represent a fundamental and permanent change for our markets, and not be just a ploy to find buyers in the interim, allowing for ties between Washington and Ottawa to be cemented anew.
Do Canadians really have either the means or inclination to ship vast amounts of oil and lumber to China or India? The logistics are so daunting that almost certainly the answer is no, for now. Yet China and India may yet come to play an important role in the Canadian economy, and political scene. For instance, Chinese interests are taking over oil explorers and producers. Just recently Calgary-based PetroKazakhstan “announced today [26 October] that the acquisition of the Company for US$55.00 cash per share by CNPC International Ltd. (“CNPC”) pursuant to a Court-approved Plan of Arrangement has closed” [cited in PR Newswire, 26 October 2005]. So is it really fair to assume that continental North American trade and economic relations will forever remain unimpacted?
Stan Markotich
Send comments to stanmarkotich@yahoo.com ¶ 8:34 AM
